BT CEO urges PM Johnson to not rush into banning Huawei from the 5G network

Written by: Wajeeh Khan
July 13, 2020
  • BT CEO urges PM Johnson to not rush into banning Huawei from the 5G network.
  • Rushing into banning Huawei can result in outages and security issues.
  • Huawei requests a meeting with PM Johnson seeking a delay in its removal from 5G network.

In a statement on Monday, the chief executive officer Philip Jansen of BT Group (LON: BT.A) urged PM Johnson’s government to not rush into removing Huawei’s contribution in the countrywide 5G network. Such a move, he added, can result not only in outages but may also fuel security issues. BT expressed plans of offloading its stake in Openreach in May.

Shares of BT opened more than 1% up on Monday but gave up the majority of the gain later in the day. At 110 pence per share, BT is a little under 45% down year to date in the stock market after recovering from an even lower 101 pence per share in May. Learn more about how to choose winning stocks.

Huawei requests a meeting with PM Johnson

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Huawei was reported to have requested a meeting with PM Johnson on Sunday. The Chinese telecommunications giant is expected to request the British government to delay its removal from the 5G network. As per vice president Jeremy Thompson of Huawei UK, the potential impact that the new sanctions from the United States will have at large was not yet clear.

According to Jansen, the United Kingdom would ideally need seven years to push Huawei out of its 5G network. Even if the government takes the matter up as a priority and commits to ramping up its efforts, it would still need a minimum of five years to accomplish the aforementioned task without risking outages or security concerns.  

Vodafone flags the same concern as BT

The CEO was being interviewed by BBC Radio. When questioned about the risks involved in pushing the countrywide telecoms operator into suspending links with Huawei in less than 5 years, Jansen said:

“We need to make sure that any change of direction does not lead to more risk in the short term. If we get to a situation where things need to go very very fast, then you are into a situation where potentially service for 24 million BT Group mobile customers is put into question – outages.”

BT, however, is not the only telecoms operator that is urging the government to rethink its stance on Huawei’s removal from the 5G network. Vodafone also echoed a similar warning last week.

BT’s performance was also reported dovish in the stock market last year with an annual decline of more than 15%. At the time of writing, the British multinational telecommunications holding company is valued at £10.94 billion and has a price to earnings ratio of 6.34.